[Source/Observer Network Qi Qian] On local time April 10, the Central Bank of Argentina released a statement saying that China and Argentina agreed to extend part of the amount in the bilateral local currency swap agreement for 12 months until June 2026. According to the statement, the extended amount is worth 35 billion yuan (5 billion US dollars).

Associated Press said that this has alleviated some pressure on Argentina's increasingly dwindling foreign exchange reserves and highlighted the strategic importance of the China-Argentina partnership.

Bloomberg mentioned that the timing of this extension announcement is crucial. A few days after the announcement, US Treasury Secretary Scott Bechtel is expected to visit Argentina and meet with President Milei on the 14th. Just a few days ago, a US official attempted to sow discord between China and Argentina, pressuring Argentina to terminate its local currency swap agreement with China.

Currency swaps usually refer to market transactions where two parties holding different currencies exchange equal amounts of money at an agreed-upon rate at the beginning, then swap back to their respective currencies and pay corresponding interest at the end. The prior agreement is called a currency swap agreement.

Argentina was the first Latin American country to sign a currency swap agreement with China. In April 2009, the People's Bank of China and the Central Bank of Argentina first signed a three-year, equivalent 70 billion yuan local currency swap framework agreement, with an implementation validity period of 3 years. After multiple extensions, on June 9, 2023, the central banks of the two countries renewed the bilateral local currency swap agreement, with a scale of 130 billion yuan, valid for 3 years, until June 2026.

According to the agreement, the 35 billion yuan amount that was originally scheduled to expire in June 2024 has been extended to this June after last year's renewal. After this latest renewal, all amounts in the China-Argentina local currency swap agreement will be extended until June 2026.

Screenshot of the Central Bank of Argentina's statement

Associated Press commented that using renminbi instead of US dollars for payment provides breathing room for Argentina's increasingly depleted foreign exchange reserves, thereby supporting the volatile peso. This helps Argentine enterprises陷入 crisis to pay for Chinese imports and makes it easier for Chinese enterprises to invest in Argentina.

Data shows that currently, China has continuously become the second largest trading partner and the largest source of imports for Argentina for many years, while Argentina is China's sixth largest trading partner, sixth largest export market, and fifth largest import source in Latin America. Statistics show that in 2023, the bilateral trade volume between China and Argentina reached 17.399 billion US dollars (approximately 126.16 billion yuan).

"The timing of the release of the latest statement from the Central Bank of Argentina is also crucial." Bloomberg believes that currently, Latin America has become one of the battlefields for influence between the United States and China, especially in Argentina.

It was reported that before Bechtel arrived in Buenos Aires on the 14th, the IMF Executive Board was scheduled to vote on a new 20 billion US dollar aid package for Argentina on local time the 11th. Given that the United States is the largest stakeholder in the IMF, this will be an important signal of support for Argentina by the Trump administration.

Earlier in the morning on the 10th, Bloomberg cited sources as saying that the US government is exploring whether to provide a credit line to the Milei government as part of a broader plan to enhance Argentina's hard currency reserves. Some analysts said, "Before the US determines the plan (which may require congressional approval), retaining all financing options is in Argentina's best interest."

President Milei of Argentina is a supporter of Trump and made derogatory remarks about China during the 2023 election campaign, shouting, "China is an assassin" and "breaking off relations with China." However, since taking office, Milei has softened his stance towards China.

Last September, Milei referred to China as a "interesting trading partner" in an interview. Video screenshot

Last September, Milei expressed gratitude to China for renewing the local currency swap agreement, saying it would enable Argentina to fulfill its obligations to the IMF. He recalled that when Argentine officials held talks with Chinese officials, "the next day, they agreed to renew." Milei said, "China is a very interesting trading partner because they ask for nothing but not to be disturbed."

Bloomberg also mentioned that in recent weeks, the trade war triggered by Trump's tariffs has shaken global markets. Meanwhile, US government officials have criticized the China-Argentina local currency swap agreement, attempting to pressure Argentina to terminate the agreement.

Recently, US Special Envoy for Latin America, Carloine, attempted to sow discord between China and Argentina, slandering China's local currency swap cooperation with Argentina as a "ransom mechanism" imposed by China on Argentina, and calling on Argentina to consider termination. He also pressured Argentina, claiming that the US hopes to ensure that any agreement Argentina reaches with the IMF will not be used to "extend" the above cooperation or enhance China's influence gained through the local currency swap.

Foreign Ministry Spokesperson Lin Jian responded on April 8, stating that China has always conducted practical cooperation in all fields with Argentina on the basis of equality and mutual benefit. For a long time, China's local currency swap cooperation with Argentina has played an important role in maintaining economic and financial stability in Argentina, and has been welcomed and positively evaluated by Argentina.

Lin Jian pointed out that China's bilateral cooperation with relevant countries has never targeted a third party and should not be interfered with by a third party. As for who is actually engaging in blackmail, coercion, or causing trouble without reason, justice lies in people's hearts. We advise the US side to adjust its mindset and do something substantial for the development of Latin America and the Caribbean instead of spending time sowing discord.

This article is an exclusive contribution from Observer Network and cannot be reprinted without permission.

Original article: https://www.toutiao.com/article/7491932826523173414/

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